Investing 101: A Beginner’s Guide to Build Wealth Working in Skilled Trades
Building wealth is something that everyone can achieve with hard work, discipline, and an understanding of basic finance principles. And if you work in skilled trades, you have a unique opportunity to invest in yourself and your future. With a steady income and job stability, you can start planning and investing for the long term.
In this beginner’s guide, we’ll explore some investment strategies you can use to build wealth while working in skilled trades.
1. Start with a budget
Before you start investing your hard-earned money, it’s important to understand your financial situation. Create a budget that includes your monthly income and expenses. This will give you a clear picture of your cash flow and how much money you have left over after paying your bills.
If you find that you’re spending more than you’re making, it’s time to cut back on unnecessary expenses. You may also want to consider finding ways to increase your income. Once you have freed up some extra cash, you can begin investing it.
2. Build an emergency fund
An emergency fund is an essential part of any financial plan. It acts as a safety net for unexpected expenses, such as a medical emergency or a car repair. Ideally, your emergency fund should be large enough to cover three to six months’ worth of living expenses.
If you don’t have an emergency fund, start building one today. Set aside a portion of your income each month until you have enough saved up.
3. Pay off high-interest debt
Before you start investing, it’s important to pay off any high-interest debt, such as credit card balances or personal loans. High-interest debt can quickly become a burden on your finances, and it can be difficult to build wealth while paying high interest rates.
Focus on paying off your high-interest debt as quickly as possible. Once you’ve paid off your debt, you’ll have more money to invest.
4. Take advantage of retirement accounts
Retirement accounts, such as 401(k)s and IRAs, are great investment options for skilled trade workers. These accounts offer tax advantages and can help you build wealth over the long term.
If your employer offers a 401(k) plan, consider contributing to it. Many employers will also match your contributions, which is like getting free money. If you don’t have a 401(k) option, consider opening an IRA account.
5. Diversify your investments
Diversification is a key strategy for building wealth over the long term. By investing in a variety of asset classes, such as stocks, bonds, and real estate, you can reduce your risk and increase your potential returns.
Consider working with a financial advisor who can help you create a diversified portfolio that aligns with your goals and risk tolerance.
Investing in your future is a smart financial move, especially if you work in skilled trades. By following these basic investment strategies, you can start building wealth and securing your financial future. Remember to start with a budget, build an emergency fund, pay off high-interest debt, take advantage of retirement accounts, and diversify your investments. With these tools in hand, you’ll be on your way to achieving your financial goals.
> For one on one or group assistance with personal finance, STR recommends that you check out the following resources:
> Inaccuracies with Bureau of Labor Statistics (BLS) data: Many of our blog posts will quote BLS data. SkilledTradeRescue.com has been able to identify that data quoted specifically for Skilled Trades can be as much as 50% LOW in many USA labor markets. For more information on these inaccuracies please visit the STR national labor survey page at the link below. On this page there is a video containing the latest information at the top of the page as well as other information. If you currently work in skilled trades, PLEASE consider participating in our national labor survey.